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tv   First Business  FOX  October 1, 2012 4:00am-4:30am PDT

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save you money on car insurance. plus, precious trader ideas on trading silver and gold. the french president is saying oui to a sky-high tax rate. and, american consumers brace for a price bump at the grocery store. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, october 1st. i'm angela miles. in today's first look: as the fourth quarter gets underway today, the third quarter ends on an up note. the dow rallied more than 4%, with
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the s&p 500 and nasdaq each pulling in gains of around 6% during the past 3 months. electric car prices are falling. nissan is offering new discounts on the leaf due to slowing sales. the car can go 100 miles on battery power. the chevy volt is also selling at a lower price. buyers are entitled to a tax break. meanwhile, some relief at the gas pump. unleaded gasoline is down a nickle per gallon from last week. and united continental's ceo tells cnbc the airline might follow in delta's tailwinds and buy an oil refinery to save money on jet fuel. larry levin of trading advantage joins us now. larry, here we are. it's the month of october. do investors have reason to be nervous or afraid of this month, which can sometimes be a bit scary? > > you know angie, if we
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weren't sitting a month in front of the election, then i would say yes. but with the election ahead, i believe these markets will keep going up. we dropped a little bit last week, but i think we'll find some support. buyers will come in, and i think october will pretty much be an up month. but if you took the election out of there, i would tend to agree with you. > > will china be in focus today for traders? > > i think people will lose at that certainly. we've been talking a lot about the growth slowing down, if that's what's going on there, because that's an issue, that's going to be in issue here. so certainly this week, and especially today, traders are going to watch that. > > as we face the week ahead, there's a jobs number at the end of the week. what will you be buying or selling ahead of that? > > i really am a big fan of the stock indexes, and i think the stocks indexes can hold support, which will be around the 1430 area, especially in the s&p futures contract. if they hold that area, i think you can buy equities, and i think you can buy stock indexes this week. if they get below that area, then i think you want to lighten up a little bit and maybe play from the short side. but 1430's the area i'm watching in the s&ps. > > do you have any individual sectors you'd buy or stocks at all? > > the banking stocks and
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financials for the most part can go up as long as they hold that level. if they don't hold that level, i think we can buy lower prices. but if they do, i'd be a big fan of financials, especially the ones on the lower end that you can take low risk on. > > larry levin of trading advantage. good to have you on the show. have a good week. > > you too. thank you. germany is jumping on the regulatory bandwagon to prevent high-speed trading from causing market instability. under new rules, traders will have to register. they'll be fined if they use high-speed systems in excess. and stock markets will have to add circuit breakers to halt trading if problems pop up. the rules would help avoid conditions that triggered the flash crash of 2010, and knight capital's $440-million loss that required a bailout from financial firms. the super-rich could get hit with a super tax in france. french president francois hollande detailed his 2013 budget friday. it calls for the the country's wealthiest individuals and corporations earning above $1.3 million a year to be taxed at a 75% rate. the rate for incomes over 193,000 will be 45%. hollande says most of the burden will be
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on corporations in france. the deep-in-debt goverment expects new tax revenues will generate $39 billion. oops. the u.s. postal service missed a payment over the weekend. the $5.6 billion due the treasury last night is its second default. last month it missed a $5.5-million payment. the usps has been begging congress to let it eliminate saturday mail service and reduce future health benefit payments to retirees, but congress, so far, won't let it. bank of america could soon mail out $2.4 billion in checks to investors who sued the big bank over its acqusition of merrill lynch. b of a is agreeing to pay to settle a class action lawsuit from 2009. bank officials, however, are denying the suit's allegations that executives mislead investors about the financial health of bank of america when it acquired merril lynch. the deal still needs court approval. by the end of the month, starbucks will debut in its
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latest country, india. its first indian store will be in mumbai. in january, the coffee company said it wanted to open 50 starbucks by the end of the year through a partnership with india coffee chain tata global beverages. reports say it's likely it won't meet that goal. prices at u.s. grocery stores appear more likely to get a bump following the latest crop report. corn, soybean and wheat storage are lower now than they were at this time last year. traders were surprised to learn corn is at its lowest level since 2004. friday, corn futures rallied more than 5% on the data. eventually, those higher prices will affect consumers. "all of your coca-cola and soft drinks are flavored with corn syrup, which is going to get more expensive with the corn prices heading higher. even things like starch could go up a little bit." those comments were from trader jack scoville of price futures
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group. he is skeptical about earlier reports of a bacon shortage because of the large amount of hogs that would have be slaughtered to cause a shortfall of pork. in our cover story, auto gadgetry that would make james bond proud. but instead of helping a crafty spy elude bad guys, these devices do all kinds of things including helping you lower your car insurance premiums. in planes, trains and busses they're called black boxes or event recorders. they provide a readout of speed, acceleration, braking and a host of things about engine performance. these telematic devices are now rolling out for cars. later this month, the audiovox company begins selling its car connection in sears and pep boys stores across the country. parents of teenage drivers are expected to be particularly interested. but telematics are especially popular with the insurance industry, and in most states now, companies are offering them to customers. "8 out of the 10 top insurers have these programs where motorists can sign up voluntarily to put these
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telematics devices into their cars and get discounts of up to 30%." that's a pretty big incentive, and whether it's gm's on-star technology or an aftermarket device that plugs into the car's under-the-dash diagnostic connecter, a growing number of consumers are happy to share their driving information with their insurer. while telematics can help track stolen vehicles and determine fault in an accident, there is something a little big brotherish about your insurance company knowing how fast you're driving and yoiur acceleration habits. "if they are a little leery in letting an insurance company look at when and how and how far they drive, they can opt in, opt out - they can go month-by- month and see if they even enjoy the program." progressive insurance makes a point of saying its snapshot telematic device does not record location and won't necessarily know if you are speeding. unless of course you're going a
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hundred miles an hour. progressive will know if you're, say, driving 50, but because location isn't tracked, they won't know if that's perhaps on a residential street. and the insurers say telematics data are used to help you drive better & lower premiums, not to penalize you. following a week of angry and confused customers, apple is offering an apology for flaws in the map app on its brand new iphone. ceo tim cook apologized for the errors on apple's website, which include wrong addresses and misnamed landmarks. in a rare move for a ceo, he directed customers toward rivals such as google maps. cook promises as more customers use apple maps, service will get better. despite the so-called "mapple- gate," iphone 5 sold out in a majority of stores. eastman-kodak is nearly out of ink, meaning it plans to stop making inkjet printers next year. the company is refocusing on more profitable commercial enterprises, though it will
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still sell ink to existing printer owners. kodak filed for bankruptcy this year and has been shedding lower-performing divisions. it is cutting 200 jobs in addition to 2700 layoffs for the year. the sony corporation is taking on a new image. sony, which has been losing money with its television business, is paying $645 million to become the largest investor in olympus. the deal gives sony access to olympus medical imaging and other devices. the partnership also helps olympus, which hid more than a billion dollars in losses in an accounting scandal. macy's is toeing the line with a new shoe strategy. next spring, finish line boutique shops will appear in 450 macy's stores. this could boost annual sales for finish line footware by as much as $350 million. the store-within-a-store trend is growing. jc penney is opening nearly 100 smaller boutiques within its department stores. while admissions to college are up, grad school applications are dropping. the council of graduate schools reports the
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number of students enrolling in graduate school fell for the second year in a row, declining 1.7% from the fall of 2010 to 2011. grad school applications surged in 2008 and 2009. amazon is uncorking plans to sell wine online. california wineries and amazon are reportedly working on a service that will ship wine directly to consumers. a lot of upside potential here as online wine purchases make up a mere 1% of wine sales in the u.s. the wall street journal says amazon will have the program running by the holidays. if you are happy and you know it, eventually you will be able to wag your tail. a new gadget called "shippo tail" was recently introduced at the tokyo games show. a clip-on headset and monitor reads your brain wave activity and heart rate, and when you are feeling good, your tail wags.
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still to come, is there a golden opportunity in the metals market? a trader's take is coming up. but first, our monthly check-up on small business. find out why new data is causing some disappointment. that's next, after this in-the-know message.
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every month we look at the surepayroll small business scorecard, and each month we're always waiting for a trend to lock in. the scorecard was just issued for september. michael alter is the president & ceo of surepayroll. in your polling of 40,000 businesses, you really do look for trends. and for the first time you're telling me there is a trend. unfortunately, it's not in the direction we'd like to see. > > right. unfortunately we continue to see a slight deterioration in the small business economy. we're seeing the number of folks on the payroll decline slightly. it's down 20 basis points month- over-month. and the average paycheck remains flat, which means that people are not getting more hours at a time when clearly people need larger paychecks. > > also, optimism i was rather shocked to see drop - what was it? - 15%? > > we saw a very significant drop in optimism from 60% to 45%. that means less than 1 in 2 small business owners are optimistic about the future. the real issue and the real challenge with that is, as a small-business owner, i make my decisions about hiring and
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growing my business based on how comfortable i am about my future success and the return on that investment. when i'm pessimistic, like we are right now, i'm going to freeze. > > it seems to be tied to the election right now, because you asked that very question. > > we did, and it was a little surprising, but we found that in 3 in 4 small businesses, their optimism is really tied to the election. they're concerned about the outcome and where the world is going to go from there. > > and they're more inclined to want mitt romney, because they feel he's a better friend to small businesses. > > the survey results from what our customers had to say was that over 60% of them would vote for governor romney as opposed to only around 30, 32% that would vote for president obama. > > what about contractors? you're finding that as full- time employees are dropping, those numbers are dropping, that in fact 1099 people, the contractors, are increasing. > > right, certainly some of what we're seeing, if there are jobs that are being added, or at least keeping us from dropping further, is that we're seeing more independent contractors
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added as opposed to full-time workers. that creates a challenge for people, because you don't have the comfort of a long-term, stable job. you don't often have the health insurance. you have to pay in for your own social security benefits. it's more challenging for the work force. > > what is the one thing that small businesses would like to see - outside of a new president - to really give them the kickstart they're waiting for? > > the number one thing we're hearing from small businesses is not easy to fix, and that is they need demand. they need more demand for the services and products that they sell. > > and that's sort of a chicken-egg... > > right. and until we figure out how to do that - and there's lots of ways of doing it: you can have the government spend more money, you can give money back from the government and have the small businesses spend it in tax relief. either side will work. the problem is being sort of half-pregnant and trying to do both. > > michael alter from surepayroll. thanks so much. > > thanks for having me. still ahead, some shiny opportunities for gold and silver are catching one trader's eye. he'll tell us how to play them, next.
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traders are mining for trading opportunities in silver and gold. bill baruch of just happens to be one of those traders. good morning to you bill. > > good morning. > > what do you see in the gold or silver market that looks attractive to you right now? > > what i do like is the silver/gold ratio at the moment: dividing the price of silver into gold. it's achieved two separate levels in the past
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three years. heading into 2009, when gold was hovering right below $1,000, the market had a ratio just above 80. and then when silver made the run to $50 last year, last spring, the ratio was just above 30. so when we consolidated earlier this year, the market then had a halfway retracement between that range, and i think that's what's going to help drive this market. i have expectations, big expectations, for gold moving to $2,000 by quarter one next year. > > one caveat with gold though: when you get these big moves to the upside, you have to be careful about the actual demand for it, because you always want to make sure that there's going to be a buyer on the other side, otherwise you might get stuck with a commodity. how do you handle that or what do you foresee? > > actually, china has had some of the strongest buying we've seen in recent years. it's actually been quiet on the news, but they've been in there, they've been buying, and
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with the fed announcing qe3, qe- to-infidelity, it's game on. and i think you've got to buy on pullbacks, especially in the middle of the week. the market put a low in at $1,738, taking out some major levels at $1,750. it was a frightening pullback, but when that market closed back above $1,750 that day, i kind of called all my clients and said we need to get back in. the strength is there. people are buying and bidding on this market on pullbacks. > > what about silver? what do you see for that market? you mentioned that at the beginning. > > well silver itself, they had a huge run last year, touching $50. right now it's consolidated this year below $30 and just pressed above $30, about $35 right now. i see this potentially going to $40. i think that silver/gold ratio, which i'm looking at right now, is what's going to allow this market to move. when silver put the high in last year, the silver/gold ratio was at its lowest point. but gold still hadn't made its new high above $1,900. that's what i'm looking at, for silver to make another
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run to $40. not much above there, but that's what's going to allow gold to make its run and power through the previous highs. > > thanks for your insights. that's bill baruch of > > thank you. more trader talk is just ahead. andrew keene tells us about a big bank that he says is giving off a buy signal. chart talk is next.
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andrew keene, president of, joins us now to take a look at a big bank that has had an outstanding performance over the last three months. good morning andrew. > > good morning angie. > > what do you see that you like in that chart of jpm? > > j.p. morgan, the short-term has been very, very strong. a lot of the stocks kind of look the same. they get these bottoms around june, july, august, and it's been up since then. j.p. morgan has actually just sold off some of the recent highs of $42. it's trading right around the $40 level, which is the 20-day moving average. j.p. morgan is trading above all their moving averages - the 20, the 50, the 150, the 200 - those
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are all around the $38 level. it had the london whale episode, it sold off really hard, bounced back, got a bounce through that $38 level - that was the london whale number, that's very, very critical. now it's trading around $40. i'm looking to get long j.p. morgan, and i'm using this $40 level as a pivot point level. i'm going to look to see where the futures are. j.p. morgan will sell off with the futures this week. we got kind of dicey last week. the market didn't really have that much conviction. it could be end-of-the-quarter markups, markdowns, buying certain stocks, selling other stocks. i'm going to watch it this week. if it stays above this $40 level, i'm going to buy back into it, looking for it to break to that $42 level, possibly up to $45, and i'll have a stop right under the $40 level. > > this was a classic lesson that you had to buy this stock when there was so much negative news, such as that $2-billion- plus loss that jpm had. > > yeah, the news is always worse than everybody anticipated. we see a lot of these good companies, and the bp oil spill was another one. it did sell off, and it kept
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selling off, selling off, selling off. but at some point it did get bit. so if we see a chart that is trending down down down, lower lower highs, i'm not looking to jump in. but once i see it consolidate at a certain level - and i see buyers coming in at j.p. morgan around the $32 level - once i see the buyers come in, then i can jump on board with them with a pretty tight stop, very similar to bp back during the oil spill. > > thank you for teaching us a thing or two today. that's andrew keene, president of that's it for now. coming up tomorrow, we'll let you know if facebook shareholders are making headway with their lawsuit against the social media giant over the botchd ipo. from all of us at first business, have a great start to your week!
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. good morning, the coast guard is continuing it's search for two men whose boat capsized off the coast. and at least four people open fire. and now police need your help to figure out what happened. san francisco expand -- san
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francisco's bag band goes into effect and you will now have to pay. it is all on ktvu channel 2 morning news. good morning, thank you for waking up with us this monday morning, october 1st, i am pam cook, it was a beautiful weekend, what is it going to be like today? >> well, there is only a few patches of some clouds, but i don't think it will stand much of a chance. this looks to be the warmest by a mile, here is sal. good morning, now traffic is doing well around the bay area and as a matter of fact we are looking westbound. also, the morning commute looks good if you are driving into the city. we will tell you more about that straight ahead. at 4:29 let's go back to the desk. the search continues for two missing men off


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